Originally Posted by
myles
BJ1 I think you've said something like that before - can you expand on it a bit? The Harmoney forecast default rates are an annual percent of loans, not interest rate?
If you assume the average loan in the above is $100, that's only 8 loans defaulted - for the spread that looks like less than Harmoney would forecast to me?
The 36 vs 60 month comparison isn't as simple as it looks - an overly simple example - to get the same interest as a 60 month loan you need one 36 month loan and (to make it easy) a 24 month loan - the chances of a default increase for the two loans vs the one lone. Not the best example but perhaps helps think it through.